CPS budget for 2013 has huge shortfall

Chicago school district's deficit may be $700 million

Chicago Teachers Union Vice President Jesse Sharkey, seen last year, questioned the Chicago Public Schools’ revenue projections, which were presented Tuesday at a school board hearing. (Antonio Perez, Chicago Tribune)

Despite severe cost cutting, scores of layoffs and wholesale restructuring last year, Chicago Public Schools faces a budget deficit estimated at $600 million to $700 million in 2013, with the cost of a longer school day still unknown, officials said.

In a presentation to the school board Wednesday, CPS officials are expected to detail how rising costs; steep drops in local, state and federal revenue; and ballooning debt obligations will combine for massive budget shortfalls over the next three fiscal years.

The deficit could top $1 billion by 2014 when the district's four-year pension holiday expires and the district will have to resume making full pension payments, said CPS spokeswoman Becky Carroll. CPS projects pension costs to increase that year by almost $340 million, Carroll said.

"There is going to be pain felt throughout the district. There is no way around that," Carroll said. "We are going to have to make tough decisions to make sure that we can close that gap."

Carroll said the district is seeking tens of millions of dollars in savings out of its central office, which could include renegotiating vendor contracts and streamlining operations. She declined to say whether this would include layoffs, but the district hopes to unveil its formal 2013 budget proposal in May.

CPS is presenting its bleak fiscal outlook in the midst of heated contract negotiations with the Chicago Teachers Union, which leave much about the district's financial picture uncertain.

Mayor Rahm Emanuel and CPS leadership pushed for a longer school day across the district beginning next school year but have not said how lengthening the day will affect the budget. Critics have asked if lengthening the school day should have been a priority in a time of fiscal crisis.

"They think they can have a 71/2-hour day? It makes no sense," said Wendy Katten, co-founder of the parent group Raise Your Hand.

"We're no longer getting federal stimulus money and state money, but the economy in other areas is beginning to revive," Sharkey said. "We're going to need to take a serious look at the kind of assumptions they're making on the tax revenue."

CPS officials closed a budget deficit of more than $700 million this year through a combination of staff cuts, program reductions at some schools and renegotiated contracts, while also raising taxes to the highest level allowed by law.

CPS Chief Administrative Officer Tim Cawley has warned the school board that there were still significant challenges ahead. He called on the state to help by lifting some of the district's pension obligations or helping recover millions of dollars in payments owed to CPS. Cawley has also called for an entirely new framework to fund public education in Chicago.

That could include changing the school funding model by shifting budgetary decisions from the CPS central office to principals.